The pharmaceutical giant and British drug maker, GlaxoSmithKline, has agreed to plead guilty and pay the government three billion dollars in a health care fraud settlement bought by the FDA. This is the largest settlement involving a pharmaceutical company in recorded history. GSK have admitted to committing three fraud charges. They promoted the off-label use of two anti-depressant drugs – Paxil and Wellbutrin. The two anti-depressants are not necessarily considered as bad medicine instead the GSK failed to apply for approval from the FDA.
GSK broke the law when they marketed the drug for a non-approved use under the FDA. The second charge that was made against GSK was when they held back data and made unsupported claims regarding its diabetes drug Avandia. The third charge that was made against GSK was when their sales team used inappropriate and illegal marketing tactics to get the doctors to prescribe their drugs. In addition to using illegal marketing tactics, they offered doctors free spa privileges, trips to Jamaica and Bermuda, and concert tickets.
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The three criminal charges involved Paxil, Wellbutrin and Avandia and included a criminal fine of $1 billion. The remaining $2 billion involves fines in connection with a civil settlement over the sales and marketing practices of the blockbuster asthma drug Advair and several other drugs (NY Times). GSK have not only violated the rules made by the FDA but also committed basic unethical behavior. Even though the $3 billion may seem like a large amount, it represent only a small portion of what Glaxo made on the drugs.
According to IMS Health, Glaxo’s diabetes drug Avandia racked up to $10. 4 billion in sales, and their two anti-depressants brought in $17. 5 billion during the years covered by the settlement. 2. Abbott Laboratoreis, settlement: $1. 6 billion, year: 2012 http://www. bloomberg. com/news/2013-08-16/abbott-labs-accused-of-racketeering-in-depakote-lawsuit. html http://online. wsj. com/news/articles/SB10001424052702304451104577390182002017146 http://articles. latimes. com/2012/may/07/business/la-fi-abbott-depakote-201205 07 Abbott Laboratories (ABT) agreed to pay $1.6 billion and to plead guilty to a criminal misdemeanor violation of a federal drug law following allegations that the company improperly promoted anti-seizure drug Depakote for unauthorized uses (The Wall Street Journal). Lawsuits filed by four groups of whistle-blowers alleged that Abbott marketed the drug for off-label uses, including for treatment of schizophrenia, dementia and autism. The company also gave doctors illegal kickbacks to talk about off-label uses of the drug to boost sales, according to the whistle-blower suits (LA Times).
Abbott plead guilty to Food, Drug, and Cosmetic Act for misbranding their drug Depakote by stating that the drug is used for threating agitation and aggression in elderly dementia patients and to treat schizophrenia. Depakote is one of Abbott’s best-selling drugs that brought in $1. 6 billion in sales during 2007. Under the FDA, the drug is only approved to treat epilepsy and bipolar disorder, epilepsy, and migraine prevention and not approved for treating dementia. The FDA does not approve Abbott off label practices and promotion as well as downplaying the risks apparent from its own clinical studies.